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ALS.TO - Altius Minerals


Guest Dazel

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https://www.insidertracking.com/company?menu_tickersearch=ALS%2ACA%20%7C%7C%20Altius%20Minerals

 

Anyone more familiar with the insider tracking site able to make sense of the recent activity? Did we see them repurchase, and then cancel, 100k shares? I'm just confused about the difference in the sign on the numbers.

 

Yes, that would be my guess. Given that the third transaction has no price reported, I am guessing it is a cancellation.

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http://www.miningweekly.com/article/anaconda-options-two-more-newfoundland-and-labrador-properties-2016-02-10

 

"Two previous NSR royalty agreements held by Altius Resources and a prospector, Paul Crocker, in relation to Viking would be terminated upon Anaconda earning its 100% interest in Viking and/or Kramer. These agreements would be replaced by new NSR royalty agreements which stipulate that the company would pay Altius a 2.5% NSR royalty granted on Viking, a 1% NSR royalty granted on Kramer and a 1.5% NSR royalty granted on an area of interest within 3 km of the combined Viking and Kramer properties.

 

It is our preference that if you wish to share this article with others you should please use the following link:

 

http://www.miningweekly.com/article/anaconda-options-two-more-newfoundland-and-labrador-properties-2016-02-10"

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http://www.bloomberg.com/news/articles/2016-02-16/the-great-iron-ore-flood-claims-biggest-victim-in-anglo-american

 

It doesn't look like we've reached capitulation in the iron ore market yet given that they're still ramping up production, but this has to be the beginning of the end of iron ore's decline, no?

 

“That’s the one way not to make money in this game -- buy high and sell low -- which is sadly what they’ve done to perfection,” Ben Davis, a mining analyst at Liberum Capital Ltd. in London, said by phone.
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There were clues in the article for the turning time of the iron ore market:

 

"Anglo’s move doesn’t mean iron ore supply will be removed from the market. An exit of Kumba may take more than 18 months and it wants to continue to ramp up production at Minas Rio before selling, a process that could take as long as three years, the company said."

 

Once they announce a completed sale of Minas Rio, look for a rebound in iron ore prices beginning shortly afterward. Back up the truck. When Cliffs announces an acquisition in the Labrador Trough, time to unload.

 

 

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New presentation--many repeat slides. They are really emphasizing land bank opportunities.

 

http://altiusminerals.com/uploads/TD-2016.pdf

 

I noticed between the December presentation and this one, cash and marketable investments dropped from $50 m to $30 m. The two large equity investments were recorded on the 2Q financials dated October 31 so unless I'm missing something (regrettably, there is precedent), they've deployed a fair bit of capital within the last couple of months. Debt/share didn't change so it wasn't debt repayment. I only see 100,000 shares repurchased and daily repurchase volume limits mean that can't be a big factor.

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It was early March last year when Labrador Iron Ore Royalty Co announced the ballot proposition to allow for royalty acquisition and share issuance. As far as I can tell, Osisko still has it's nearly 10% stake in LIORC. It will be interesting to see if this issue comes up again and whether or not Altius is involved. For it's size, Osisko appears to be packing a lot of liquidity.

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Starting to wish my limit orders to sell half the share's I've accumulated in recent weeks at $7.50 had filled. Was hoping to pocket a quick 30% on those shares and let the rest of my recent purchases go at $8 in favor of cash.

 

It's hard not to hold, but I already had a lot allocated to Altius and added 25% at prices in $5.50-$6.50 range so was looking to lighten up a bit. I guess it's time like this that the difference between brokers is crucial seeing as the price definitely hit my limit but the orders never executed :/

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Starting to wish my limit orders to sell half the share's I've accumulated in recent weeks at $7.50 had filled. Was hoping to pocket a quick 30% on those shares and let the rest of my recent purchases go at $8 in favor of cash.

 

It's hard not to hold, but I already had a lot allocated to Altius and added 25% at prices in $5.50-$6.50 range so was looking to lighten up a bit. I guess it's time like this that the difference between brokers is crucial seeing as the price definitely hit my limit but the orders never executed :/

 

I'm not planning on lowering my (relatively huge) positon until price is near $9 USD and then only because of the relative size of yhe position

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  • 3 weeks later...

http://www.transalta.com/newsroom/news-releases/2016-03-08/transalta-announces-receipt-termination-notices-transcanada-and-as

 

Transcanada terminating power purchase agreement with Transalta affecting Sheerness. If I'm reading this right, the Alberta balancing pool steps in assuming they agree with the termination notice. It sounds like the PPA terms are unchanged in a scenario where the balancing pool buys power but can anyone verify that? If that's correct, this is an important backstop. But, if Transalta is terminating the PPA be/c it's unprofitable, what are limits to how much the balancing pool can absorb? Can anyone on the ground in Alberta provide insight in to political dynamics? If CO2 regs imposed by provincial/federal governments has made the PPA in question here unprofitable, what are the odds of legislative change and over what time frame?

 

406 (but bats only .200 when thinking about Canadian politics)

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http://www.transalta.com/newsroom/news-releases/2016-03-08/transalta-announces-receipt-termination-notices-transcanada-and-as

 

Transcanada terminating power purchase agreement with Transalta affecting Sheerness. If I'm reading this right, the Alberta balancing pool steps in assuming they agree with the termination notice. It sounds like the PPA terms are unchanged in a scenario where the balancing pool buys power but can anyone verify that? If that's correct, this is an important backstop. But, if Transalta is terminating the PPA be/c it's unprofitable, what are limits to how much the balancing pool can absorb? Can anyone on the ground in Alberta provide insight in to political dynamics? If CO2 regs imposed by provincial/federal governments has made the PPA in question here unprofitable, what are the odds of legislative change and over what time frame?

 

406 (but bats only .200 when thinking about Canadian politics)

 

The balancing pool is contractually obligated to take on the power, and its nearly a political certainty that they will, imo. If they don't, Transalta will shut down the plants and the opposition parties will use that to show how the NDP government is destroying the economy. The small amount of money on everyone's power bill isn't likely to get political traction, but a bunch of union miners and plant operators attacking the NDP certainly would.

 

Of course, the PPA's only go for a few more years (until 2020), so if these coal plants are uneconomic by the end of this decade (which currently seems likely based on the state of the AB economy and nat gas prices) they'll shut down then. Power prices in AB are very, very low right now, as a big percentage of the load is industrial use, which is in the tank due to low oil prices.

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Thank you for the insight. So in addition to mine reserve life and plant decommissioning, PPA's are a potential governing factor determining royalty duration. This announcement would truncate the Highvale and Sheerness royalties under your scenario. I see that Genesee's PPA is with the balancing pool and expires 2020 as well.

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From Westmoreland Coal's CEO Kevin Paprzyscki on 03/09 - earnings discussion:

"Before I wrap up, I want to touch briefly on an issue that rose yesterday with cancelled PPAs up in Canada. The issue is fairly new, so we haven’t had a great deal of time to analyze the specifics. That said, I want to point out again that none of Alberta’s regulations are final. There is a lot of work to be done by the Alberta government, including a complete accounting of costs which will start with our customers and continue down to our level. The people in Alberta will also to buy in [ph] to paying all these costs out of their pockets and we have the ability to reverse course when they see at the final price tag.

 

Ultimately the life [ph] of coal fired power plants up in Alberta, really everywhere, will be determined by the demand for power, how much supply exists and where the supply is located on the dispatch curve. This and our cost position, we feel pretty confident where we sit all across our operations, even with current natural gas prices. Our customers, TransCanada not being in that group, have given us confidence in our positions on both sides of the border.

 

Perhaps more importantly, current low power price levels make it very difficult to invest in any type of replacement power while generating a solid return. The markets we serve also have increasing power demand and when you factor all that in, we see our assets running for the long term."

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Thought the update on exploration initiatives was interesting. But I'm wondering why they published this.

 

In the past they have provided updates in their quarterly MD&A. I wonder if they are trying to emphasise a bit more the value in their exploration business, and the focus on copper and zinc, as a way of preparing the market for more acquisitions in this area. Or maybe just as a way of trying to make the market see them as more than just a coal dominated royalty company.

 

N.

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I'd be interested in an all-in cost for this increase in land package. Not because I have the info or skills to evaluate what they're getting for what they paid or anything. But thinking about their opportunity set, there are a lot of things that could be done. Also, how will their exploration budget change as a result of the land package? We should have updated financials/MD&A soon. 

 

Anyone looking at the Timok/Reservoir deal? What an interesting strategic position to be in for Reservoir.

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http://www.anglopacificgroup.com/presentations/

 

Anglo Pac's 2015 annual results presentation. I'm not familiar enough with the company to make any meaningful results commentary, though that doesn't always stop me. Slide 20 could be pulled from an Altius presentation. AP is clearly operating in the same space as Altius globally. I post this here as it's a primary competitor to Altius and is a candidate to be one of the unspecified equity investments Altius made last year.

406

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  • 2 weeks later...

Not sure I understand the math here. The rate changes from 3.7% to 1.5% after 75M pounds. I think that for long term we better use 1.5% for production because it's going to take them around 12 months to reach that trigger.

 

75M x 2.20$/pound = 165M$ x 0.037= 6.1M

 

If they say EBITDA will be around CAD 8-9M$ that really means 6M$ USD.

 

Does it mean that year 2 will produce only 2.4M USD of EBITDA?

On a USD 45M$ acquisition, that's about 5% current return... probably does not pay for the interests.

Of course there is the optionality of copper price, but I would have expected better terms.

 

BeerBaron

 

 

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